The Government of India has decided to exempt all customs duty on import of cotton to lower the price of cotton. This exemption would benefit the textile chain- yarn, fabric, garments and made ups and provide relief to textile industry and consumers.
Industry has been demanding for removal of 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure and Development Cess (AIDC) on raw cotton.
Shri T. Rajkumar, Chairman, CITI said, “it’s a welcome decision and will help the entire textile value chain to fight not only the steep increase in the cotton price due to the imposition of 10% customs duty on the import of cotton but also to meet the requirement of specialty cotton (extra-long-staple cotton, organic cotton, colored cotton, etc.) to manufacture high-end products for their niche markets in advanced countries”.
Shri T. Rajkumar further pointed out that MSME segments, including Handloom, Powerloom, Independent Knitting, Weaving, Processing, Garmenting and Made-up, which accounts for over 80% of the total exports have no access for Advance Authorization Scheme and duty-free import of cotton. These are the worst-affected segments, and their capacity utilization has already dwindled down to below 70%, resulting in huge job losses and a declining trend in the GST revenue.” The Government’s decision to exempt cotton import will boost their sentiments, and help the textile industry to maintain their growth momentum.
CITI Chairman hoped that the T&C Industry would be able to achieve the export target of US$ 16.96 billion (25% increase) set for the cotton value chain and the total textiles and clothing’s export target of US$ 47.029 billion (18% increase) set for the financial year 2022-23 with the help of availability of cotton fiber and other raw materials at internationally competitive prices to the Indian T&C Industry.